nep-ure New Economics Papers
on Urban and Real Estate Economics
Issue of 2020‒05‒18
forty-five papers chosen by
Steve Ross
University of Connecticut

  1. Social Interactions in Pandemics: Fear, Altruism, and Reciprocity By Laura Alfaro; Ester Faia; Nora Lamersdorf; Farzad Saidi
  2. Forecasting State- and MSA-Level Housing Returns of the US: The Role of Mortgage Default Risks By Christos Bouras; Christina Christou; Rangan Gupta; Keagile Lesame
  3. Land Valuation using Public Records and Kriging: Implications for Land versus Property Taxation in Cities By William D. Larson; Jessica Shui
  4. How Much Does Home Equity Extraction Matter for Spending? By Aditya Aladangady; Kelsey O'Flaherty
  5. Are new shopping centers drivers of development in large metropolitan suburbs? The interplay of agglomeration and competition forces By Mihaescu, Oana; Korpi, Martin; Öner, Özge
  6. On the Effects of COVID-19 Safer-At-Home Policies on Social Distancing, Car Crashes and Pollution By Brodeur, Abel; Cook, Nikolai; Wright, Taylor
  7. Heterogeneous Effects of Missing out on a Place at a Preferred Secondary School in England By Gorman, Emma; Walker, Ian
  8. Volatility Spillover and International Contagion of Housing Bubbles By Bago, Jean-Louis; Akakpo, Koffi; Rherrad, Imad; Ouédraogo, Ernest
  9. Property values, water quality, and benefit transfer: A nationwide meta-analysis By Dennis Guignet; Matthew T. Heberling; Michael Papenfus; Olivia Griot; Ben Holland
  10. Regional economic resilience in the European Union: a numerical general equilibrium analysis By Filippo Di Pietro; Patrizio Lecca; Simone Salotti
  11. Well prepared or just pushed enough to gain access? Educational Success After Private Tutoring By Maria Zumbuehl; Stefanie Hof; Stefan C. Wolter
  12. School Choice with Preference Rank Classes By Nickesha Ayoade; Szilvia Pápai
  13. Peers, Gender, and Long-Term Depression By Giulietti, Corrado; Vlassopoulos, Michael; Zenou, Yves
  14. Branching Networks and Geographic Contagion of Commodity Price Shocks By Teng Wang
  15. Covid-19 Crisis, Pandemic Resilience and Linkages to Land: An Exposition By Choudhury, Pranab R.; Ghosh, Ranjan K.; Sindhi, Sumita
  16. Bayesian Clustered Coefficients Regression with Auxiliary Covariates Assistant Random Effects By Guanyu Hu; Yishu Xue; Zhihua Ma
  17. Choosing Differently? College Application Behavior and the Persistence of Educational Advantage By Delaney, Judith; Devereux, Paul J.
  18. Daycare Choice and Ethnic Diversity: Evidence from a Randomized Survey By Mongoljin Batsaikhan; Mette Goertz; John Kennes; Ran Sun Lyng; Daniel Monte; Norovsambuu Tumennasan
  19. More roads, more conflict? The effect of rural roads on armed conflict and illegal economies in Colombia By Moreno, L. E; Gallego, J.A.; Vargas, J. F
  20. Working the boundaries of spaces for agency in adult education: How European social inclusion policy challenges adult educators' creativity By Niemeyer, Beatrix; Zick, Sebastian
  21. Distributional Effects of Intergovernmental Transfers in Mexico By Rodriguez Castelan, Carlos; Cadena, Kiyomi; Herrera, Laura Moreno
  22. Long-Term Evolution of Russia’s Market Integration By Gluschenko, Konstantin
  23. Prussia Disaggregated : The Demography of its Universe of Localities in 1871 By Becker, Sascha O.; Cinnirella, Francesco
  24. Movements in Real Estate Uncertainty in the United States: The Role of Oil Shocks By Rangan Gupta; Xin Sheng; Qiang Ji
  25. Riots and social capital in urban India By Alia Aghajanian; Patricia Justino; Jean-Pierre Tranchant
  26. History dependence in the housing market By Bracke, Philippe; Tenreyro, Silvana
  27. Is the Cure Worse than the Problem Itself? Immediate Labor Market Effects of COVID-19 Case Rates and School Closures in the U.S. By Felipe Lozano Rojas; Xuan Jiang; Laura Montenovo; Kosali I. Simon; Bruce A. Weinberg; Coady Wing
  28. Impacts of Social and Economic Factors on the Transmission of Coronavirus Disease 2019 (COVID-19) in China By Qiu, Yun; Chen, Xi; Shi, Wei
  29. Knowledge-Based Capital and Productivity Divergence By Marie Le Mouel; Alexander Schiersch
  30. Payroll Share, Real Wage and Labor Productivity across US States By Ivan Mendieta-Muñoz; Codrina Rada; Ansel Schiavone; Rudi von Arnim
  31. Product market competition and the labour market: Evidence from South Africa By Francesco Amodio; Michele Di Maio; Yifan Li; Patrizio Piraino
  32. Is housing collateral important to the business cycle? Evidence from China By Minford, Patrick; Gai, Yue; Ou, Zhirong
  33. ‘To be or not to be’ located in a cluster? A descriptive meta-analysis of the firm-specific cluster effect By Nils Grashof; Dirk Fornahl
  34. Social Connectedness in Europe By Bailey, Michael; Kuchler, Theresa; Russel, Dominic; State, Bogdan; Stroebel, Johannes
  35. Worker mobility and productivity spillovers: An emerging market perspective By Ayanda Hlatshwayo; C. Friedrich Kreuser; Carol Newman; John Rand
  36. Local Governance Quality and the Environmental Cost of Forced Migration By Aksoy, Cevat Giray; Tumen, Semih
  37. The effect of class assignment on academic performance and the labour market: Evidence from a public federal university in Brazil By Henrique Z. Motte; Rodrigo C. Oliveira
  38. The effects of day care on health during childhood: evidence by age. By van den Berg, Gerard J.; Siflinger, Bettina M.
  39. Route choice, travel time variability, and rational inattention By Jiang, Gege; Fosgerau, Mogens; Lo, Hong
  40. Chinese Aid and Local Ethnic Identification By Isaksson, Ann-Sofie
  41. Verification of the Effects of Yabu City's National Strategic Special Zone By Tomoko Kinugasa; Akifumi Eto; Koji Yasuda
  42. Race Discrimination: An Economic Perspective By Kevin Lang; Ariella Kahn-Lang Spitzer
  43. The First Weeks of the Coronavirus Crisis: Who Got Hit, When and Why? Evidence from Norway By Annette Alstadsæter; Bernt Bratsberg; Gaute Eielsen; Wojciech Kopczuk; Simen Markussen; Oddbjorn Raaum; Knut Røed
  44. Pulling Effects in Migrant Entrepreneurship: Does Gender Matter? By Alessandra Colombelli; Elena Grinza; Valentina Meliciani; Mariacristina Rossi
  45. Media Persuasion through Slanted Language: Evidence from the Coverage of Immigration By Milena Djourelova

  1. By: Laura Alfaro; Ester Faia; Nora Lamersdorf; Farzad Saidi
    Abstract: In SIR models, homogeneous or with a network structure, infection rates are assumed to be exogenous. However, individuals adjust their behavior. Using daily data for 89 cities worldwide, we document that mobility falls in response to fear, as approximated by Google search terms. Combining these data with experimentally validated measures of social preferences at the regional level, we find that stringency measures matter less if individuals are more patient and altruistic preference traits, and exhibit less negative reciprocity community traits. We modify the homogeneous SIR and the SIR-network model to include agents' optimizing decisions on social interactions. Susceptible individuals internalize infection risk based on their patience, infected ones do so based on their altruism, and reciprocity matters for internalizing risk in SIR networks. A planner further restricts interactions due to a static and a dynamic inefficiency in the homogeneous SIR model, and due to an additional reciprocity inefficiency in the SIR-network model. We show that partial or targeted lockdown policies are efficient only when it is possible to identify infected individuals.
    JEL: D62 D64 D85 D91 I10
    Date: 2020–05
  2. By: Christos Bouras (Department of Banking and Financial Management, University of Piraeus, 18534, Piraeus, Greece); Christina Christou (School of Economics and Management, Open University of Cyprus, 2252, Latsia, Cyprus); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Keagile Lesame (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa)
    Abstract: We analyze the ability of an index of mortgage default risks (MDRI) for 43 states and 20 MSAs of the US derived from Google search queries, in predicting (in- and out-of-sample) housing returns of the corresponding states and MSAs, based on various panel data and time-series approaches. In general, our results tend to prefer the panel data model based on common correlated effects estimation. We highlight that growth in MDRI negatively impacts housing returns within-sample, with predictive gains primarily concentrated beyond a year. These results are robust to alternative out-of-sample periods and econometric frameworks. Given the role of house prices as a leading indicators, our results are of value to policymakers, especially at the longer-run.
    Keywords: Mortgage Default Risks, Housing Returns, States and MSAs, Panel Data Predictive Models
    JEL: C23 C53 R31
    Date: 2020–05
  3. By: William D. Larson (Federal Housing Finance Agency); Jessica Shui (Federal Housing Finance Agency)
    Abstract: We construct land values for each parcel in Maricopa County (Phoenix), Arizona, from 2000 through 2018 using a novel administrative dataset containing the universe of land sales and parcel records in the county. We then compare residential land values constructed using two classes of source data, vacant land sales and land under existing structures. Estimated land values for developed parcels are nearly double when estimated using vacant land due to lot size plattage effects and other unobserved factors, calling into question use of vacant land sales to estimate the value of land under structures within our study area. Growth rates are similar, however, facilitating the possible use of vacant land price indices to trace valuations over time from an accurate base year valuation. Dynamics between prices of Maricopa County land and housing suggest hypothetical land value tax revenues are more pro-cyclical than property tax revenues, with betas with respect to national house prices of 3.7 and 2.3, respectively. By 2018, houses had recovered 96% of pre-crisis (2007) values, but land had only recovered 63%. These findings demonstrate a source of risk of dependence on public revenues from land value taxes versus a base-period revenue-neutral property tax.
    Keywords: land prices, price gradient, land value taxation, price dynamics
    JEL: R14 R21 R32
    Date: 2020–01
  4. By: Aditya Aladangady; Kelsey O'Flaherty
    Abstract: In this note, we investigate recent trends in home equity extraction and how these trends may have impacted household spending and residential improvements. Home equity extractions—which rose and fell with house prices in the 1990s and 2000s—have remained sluggish in the recovery despite low interest rates and gains in home equity. Compared to the mid-2000s, equity extractions have fallen especially among younger households and those with lower credit scores and higher leverage, suggesting that mortgage credit supply is likely tighter than before the recession, at least for portions of the population.
    Date: 2020–05–01
  5. By: Mihaescu, Oana (Institute of Retail Economics (Handelns Forskningsinstitut)); Korpi, Martin (Ratio); Öner, Özge (University of Cambridge)
    Abstract: We investigate to which extent shopping centers are drivers of economic development by studying how distance to newly established shopping centers affects the performance of incumbent firms located in the suburbs of the three Swedish major metropolitan areas (Stockholm, Gothenburg, and Malmö) between 2000 and 2016. We use a regression setup with 27,000 firm-year observations and explore the possible heterogeneity imposed on the results from two main elements of spatial economics theory: the size of the new retail area and the distance from the new retail area to the analyzed incumbents. We observe a clear difference in the direction of the effects of large versus small shopping centers. While competition forces are much stronger when large shopping centers make entry, yielding an average negative effect of 5% on incumbent firm revenue and 3% on firm employment, results indicate an opposite pattern for smaller shopping centers, with firm revenue and firm employment increasing by 4 and 3%, respectively. Moreover, we also observe that both agglomeration and competition effects attenuate sharply with distance from the new entrant, confirming one of the central premises of retail location theory. Finally, the results indicate that the geographical scope of the effects is much wider in the case of larger shopping centers, with the estimates becoming insignificant at about 9-10 km from the new entry, as compared to 3-4 km in the case of smaller retail centers.
    Keywords: Shopping centers; firm performance; retail location; agglomeration effects; competition; attenuation of effects
    JEL: D22 L25 P25 R11 R12
    Date: 2020–05–06
  6. By: Brodeur, Abel (University of Ottawa); Cook, Nikolai (University of Ottawa); Wright, Taylor (University of Ottawa)
    Abstract: In response to COVID-19, dramatic safer-at-home policies were implemented. The understanding of their impacts on social distancing, travel and pollution is in its infancy. We pair a differences-in-differences framework and synthetic control methods with rich cellular tracking and high frequency air pollution data. We find that state and U.S. county safer-at-home policies are successful in encouraging social distance; beginning the day of the policy trips outside the home are sharply decreased while time in residence rises sharply. With less vehicle traffic, we find: a 50% reduction in vehicular collisions; an approximately 25% reduction in Particulate Matter (PM2.5) concentrations; and a reduction of the incidence of county-days with an air quality index of code yellow or above by two-thirds. We calculate that the benefits from avoided car collisions could range from $7 billion to $24 billion while the benefits from reduced pollution could range from $650 million to $13.8 billion.
    Keywords: COVID-19, safer-at-home, lockdowns, pollution, traffic, car crashes
    JEL: P48 Q53 Q58
    Date: 2020–05
  7. By: Gorman, Emma (University of Westminster); Walker, Ian (Lancaster University)
    Abstract: Schools vary in quality, and high-performing schools tend to be oversubscribed: there are more applicants than places available. In this paper, we use nationally representative cohort data linked to administrative education records to study the consequences of failing to gain admission to one’s first-choice secondary school in England. Our empirical strategy leverages features of the institutional setting and the literature on school choice to make a case for a selection-on-observables identifying assumption. Failing to gain a place at a preferred school had null to small impacts on short-run academic attainment, but was associated with large reductions in mental health and increased fertility in early in adulthood. These effects are especially pronounced in areas which deployed a manipulable assignment mechanism to allocate school places, where we detected larger detrimental effects on high-stakes examination outcomes. A potential channel is increased early engagement in risky behaviours. Our results show that schools are important in shaping more than test scores, and that the workings of the school admission system play a fundamental role in ensuring access to good schools.
    Keywords: risky behaviours, market design, human capital, school choice, education
    JEL: I21 I24 J24 H44 D47
    Date: 2020–04
  8. By: Bago, Jean-Louis; Akakpo, Koffi; Rherrad, Imad; Ouédraogo, Ernest
    Abstract: This paper provides new empirical evidence on housing bubbles timing, volatility spillover and bubbles contagion between Japan and its economics partners, namely, the United States, the Eurozone, and the United Kingdom. First, we apply a generalized sup ADF (GSADF) test developed by Phillips et al. (2015) to quarterly price-to-rent ratio from 1970Q1 to 2018Q4 to detect explosive behaviors in housing prices. Second, we analyze the volatility spillover in housing prices between Japan and its economic partners using the multivariate time-varying DCC-GARCH model developed by Engle (2002). Third, we assess bubbles contagion using the non-parametric model with time-varying coefficients developed by Greenaway-McGrevy and Phillips (2016). We document two historical bubble episodes from 1970 to 2018 in the Japan’s housing market. Moreover, we find evidence of volatility spillover and bubbles contagion between Japan’s real estate market and its most important economic partners during several periods.
    Keywords: Bubble, Contagion, Real estate, Japan, DCC-GARCH
    JEL: C14 G12
    Date: 2020–05
  9. By: Dennis Guignet; Matthew T. Heberling; Michael Papenfus; Olivia Griot; Ben Holland
    Abstract: We conduct a comprehensive meta-analysis of 36 studies that examine the effects of water quality on housing values in the United States. The meta-dataset includes 656 unique estimates, and entails a cluster structure that accounts for property price effects at different distances from a waterbody. Focusing on water clarity, we estimate meta-regressions that account for within-cluster dependence, statistical precision, housing market and waterbody heterogeneity, publication bias, and best methodological practices. While we find evidence of systematic heterogeneity, the median out-of-sample transfer errors are relatively large. We discuss the implications for benefit transfer and identify future work to improve transfer performance. Key Words:
    Date: 2020
  10. By: Filippo Di Pietro (Universidad de Sevilla); Patrizio Lecca (European Commission - JRC); Simone Salotti (European Commission - JRC)
    Abstract: Using a spatial general equilibrium model, this paper investigates the resilience of EU regions under three alternative recessionary shocks, each of them activating different economic adjustments and mechanisms. We measure the vulnerability, resistance, and recoverability of regions and we identify key regional features affecting the ability of regions to withstand to and recover from unexpected external shocks. The analysis reveals that the response of regions varies according to the nature of the external disturbance and to the pre-shock regional characteristics. Finally, it seems that resilience also depends on factors' mobility.
    Keywords: Rhomolo, Region, Growth, computable general equilibrium model, regional economic resilience, economic shocks.
    JEL: C68 R13 R15
    Date: 2020–04
  11. By: Maria Zumbuehl; Stefanie Hof; Stefan C. Wolter
    Abstract: Decisions about admission to selective schools usually rely on performance measures. To reach a required achievement threshold students may make use of additional resources, such as private tutoring. We investigate how the use of private tutoring relates to the transition probability to an academically demanding post compulsory school and the probability to successfully pass through this school, controlling for the students competencies after tutoring, but before the transition. Using PISA and linked register data from Switzerland, we find that students who had private tutoring before the transition are more likely to fail in the selective school than students who had the same competencies without tutoring.
    Date: 2020–05
  12. By: Nickesha Ayoade (Concordia University); Szilvia Pápai (Concordia University)
    Abstract: We introduce and study a large family of rules for many-to-one matching problems, the Preference Rank Partitioned (PRP) rules. PRP rules are student-proposing Deferred Acceptance rules, where the schools select among applicants in each round taking into account both the students' preferences and the schools' priorities. In a PRP rule each school first seeks to select students based on priority rank classes, and subsequently based on preference rank classes. PRP rules include many well-known matching rules, such as the standard Deferred Acceptance rule, the Boston rule, the Chinese Application-Rejection rules of Chen and Kesten (2017), the Taiwan Deduction rules of Dur et al. (2018), and the French Priority rules of Bonkoungou (2019), in addition to matching rules that have not been studied yet. We analyze the stability, efficiency and incentive properties of PRP matching rules in this unified framework.
    Keywords: matching; school choice; Deferred Acceptance; Boston rule; stability
    JEL: C78 D61 D78 I20
    Date: 2020–02–22
  13. By: Giulietti, Corrado; Vlassopoulos, Michael; Zenou, Yves
    Abstract: We provide first evidence that peer depression in adolescence affects own depression in adulthood. We use data from Add Health and an identification strategy that relies on within-school and across-cohort idiosyncratic variation in the share of own-gender peers who are depressed. We find a significant peer effect for females but not for males. An increase of one standard deviation of the share of own-gender peers (schoolmates) who are depressed increases the probability of depression in adulthood by 2.6 percentage points for females (or 11.5% of mean depression). We also find that the peer effect is already present in the short term when girls are still in school and provide evidence for why it persists over time. Further analysis reveals that individuals from families with a lower socioeconomic background are more susceptible to peer influence, thereby suggesting that family can function as a buffer. Our findings underscore the importance of peer relationships in adolescence with regard to the development of long-lasting depression in women.
    Keywords: Peer effects,depression,contagion,gender,family background,adolescence,policy
    JEL: I12 Z13
    Date: 2020
  14. By: Teng Wang
    Abstract: This paper studies the role of banks' branching networks in propagating the oil shocks. Banks that were exposed to the oil shocks through their operations in oil-concentrated counties experienced a liquidity drainage in the form of a declining amount of demand deposit inflow as well as an increasing percentage of troubled loans. Banks were forced to sell liquid assets, and contracted lending to small businesses and mortgage borrowers in counties that were not directly affected by the oil shocks. The effect is magnified when banks do not have strong community ties, but is mitigated if banks' branching network is sufficiently dispersed. I also find the decline in local credit supply cannot be completely offset by healthy competing banks' increased lending, providing fresh evidence from the perspective of bank competition.
    Keywords: Bank competition; Oil shocks; Out-of-market lending; Transmission of shocks; SME lending
    JEL: G20 G21 G30
    Date: 2020–05–01
  15. By: Choudhury, Pranab R.; Ghosh, Ranjan K.; Sindhi, Sumita
    Abstract: For a COVID-19 like pandemic, the Achilles heel is an unsuspecting villain – rapid and global land use changes. The way governments, businesses and communities see, relate to and use land, not only influences the outbreak but also determines their impact on humanity and development. Drawing upon empirical evidences from epidemiology and land governance, this article argues why the current situation implores the need to focus on the interaction between land use and global diseases. Apart from dwelling on causal links, we discuss the externalities that industrial, urban and rural development in India are poised to face because of the pandemic’s potential impact on land, biodiversity and wildlife habitat, property rights and housing. We also underline reform options for policy and practice, that must be discussed and acted upon.
    Date: 2020–05–08
  16. By: Guanyu Hu; Yishu Xue; Zhihua Ma
    Abstract: In regional economics research, a problem of interest is to detect similarities between regions, and estimate their shared coefficients in economics models. In this article, we propose a mixture of finite mixtures (MFM) clustered regression model with auxiliary covariates that account for similarities in demographic or economic characteristics over a spatial domain. Our Bayesian construction provides both inference for number of clusters and clustering configurations, and estimation for parameters for each cluster. Empirical performance of the proposed model is illustrated through simulation experiments, and further applied to a study of influential factors for monthly housing cost in Georgia.
    Date: 2020–04
  17. By: Delaney, Judith (Economic and Social Research Institute, Dublin); Devereux, Paul J. (University College Dublin)
    Abstract: We use administrative data from Ireland to study differences in college application behavior between students from disadvantaged versus advantaged high schools. Ireland provides an interesting laboratory for this analysis as applicants provide a preference-ordering of college programs (majors) and marginal applications are costless. Also, college admission depends almost completely on grades in the terminal high school examinations. Thus, we can compare the application choices of students who have equal chances of admission to college programs. Conditional on achievement and college opportunities, we find that students from advantaged high schools are more likely to apply to universities and to more selective college programs. They are also more likely to have preferences that cluster by program selectivity rather than by field of study. Our results suggest that, alongside differences in achievement, differences in college application behavior also cause persons from advantaged high schools to be more likely to enroll in selective colleges and enter more selective programs. Importantly, we find that enrollment gaps for equally qualified applicants are smaller than differences in application behavior; the relatively meritocratic centralized admissions system based on achievement undoes much of the effect of the differences in application behavior.
    Keywords: college applications, high school advantage, centralized admissions system, college major choice, higher education, educational mismatch
    JEL: I24 J24
    Date: 2020–05
  18. By: Mongoljin Batsaikhan (Georgetown University); Mette Goertz (CEBI, Department of Economics, University of Copenhagen); John Kennes (Aarhus University); Ran Sun Lyng (Aarhus University); Daniel Monte (Sao Paulo School of Economics- FGV); Norovsambuu Tumennasan (Dalhousie University)
    Abstract: Discrimination among individuals is very well documented in the literature, but much less is known about how discrimination is passed down through generations. By designing and conducting a randomized survey to study daycare choices and ethnic diversity, we provide evidence of how biases against ethnic minorities affect parental choices of early childhood education. We asked parents in Copenhagen to choose between two daycares structured vs. free-play. Each daycare had testimonials from (fictive) parents whose child allegedly attended the daycare, and the survey randomized the names of the testifying parents across the sample. Another novelty of our study is that we are able to capture how discriminatory attitudes towards ethnic minorities interact with preferences for specific teaching styles. In our results we find bias against ethnic minorities among parents who prefer the structured daycare. We validate our results through data on willingness to travel to the preferred daycare, which is higher for parents who prefer the structured daycare when there was an ethnic minority name associated with the free-play daycare.
    Keywords: school choice, discrimination and intergenerational transmission
    JEL: D63 J15 I24
    Date: 2019–12–20
  19. By: Moreno, L. E; Gallego, J.A.; Vargas, J. F
    Abstract: This paper estimates the impact of rural roads on armed conflict and illicit crops in Colombia over a fourteen year period of rapid growth of road investments. We estimate the causal impact of these interventions using micro-data of the royalties revenues to the transport sector at the municipal level, and implement a strategy of Difference-in-Differences with staggered adoption. The results show that new rural roads, in particular small projects known as placa-huella, have a positive causal effect on armed conflict and on coca crops. These unintended effects of road provision are mainly driven by the intensification of violence in wealthier municipalities. In these places, we find that the new connectivity leads to an increase in the production of legal crops. Hence, wealthier municipalities are more attractive to armed groups and more vulnerable to attacks that seek to expropriate these new rents. In addition, the institutional background seems to be determinant in the sign of the effect: in municipalities with qualified and stable institutions, road provision mitigates the development of illegal activity. These results highlight the importance of providing public goods in parallel with strengthening the local state capacity through reliable institutions.
    Keywords: Roads, Public Goods, Armed Conflict, Illegal Economies, Royalties
    JEL: H41 H54 O12 D2 D74 O11 O4 R4
    Date: 2020–05–08
  20. By: Niemeyer, Beatrix; Zick, Sebastian
    Abstract: Over the past 30 years, European governance has increasingly influenced how adult education is provided, thanks to more intensive strategies of governance. The paper will elaborate on the tension between power and creativity by examining the relationship between supranational – that is, European – governance, and regional or local educational practice. At first sight, educational policy appears as a mechanism of power, being heavily focused on control, as evidenced through tightening funding regulations. A closer look, however, reveals how regional actors employ creative strategies to carry out the complex business of European project work.
    Keywords: Europe,European Social Fund,youth unemployment,school-to-work transition,school to work
    Date: 2019
  21. By: Rodriguez Castelan, Carlos (World Bank); Cadena, Kiyomi (World Bank); Herrera, Laura Moreno (World Bank)
    Abstract: A rigorous understanding of the developmental effect of fiscal transfers to subnational governments remains an important policy research issue globally. This paper exploits a novel dataset of 20 years of municipal poverty maps and local public finances to study the effects on local welfare of a large fiscal transfer fund earmarked for social investment in more than 2,000 Mexican municipalities. Results show a positive but modest effect on the average household income, and positive effects on seven nonmonetary welfare measures. In contrast, these funds have no significant impact on extreme and moderate monetary poverty. These results provide important lessons for policy on the effects of earmarked funds to reduce territorial poverty and inequality in terms of incentives to design formulas to distribute earmarked fiscal resources to subnational governments.
    Keywords: fiscal federalism, earmarked transfers, decentralization, poverty, Mexico
    JEL: C26 D30 H72 H77 I3
    Date: 2020–04
  22. By: Gluschenko, Konstantin
    Abstract: This article considers an aggregated market represented by a staples basket and analyzes changes in the degree of spatial integration of this market during 1992 to 2019. In an integrated market, interaction of demand and supply in the national market, and not in a regional market, determines the regional price of a good. Based on this, the strength of dependence of regional prices on regional quantities demanded serves as a measure of the degree of market integration.
    Keywords: market integration price dispersion Russian regions
    JEL: R10 R15 R32
    Date: 2020–05–05
  23. By: Becker, Sascha O. (Monash University, University of Warwick, CAGE, CEPR, CESifo, and ROA); Cinnirella, Francesco (University of Bergamo, Danish Institute for Advanced Study, CAGE, CESifo, and CEPR)
    Abstract: We provide, for the first time, a detailed and comprehensive overview of the demography of more than 50,000 towns, villages, and manors in 1871 Prussia. We study religion, literacy, fertility, and group segregation by location type (town, village, and manor). We find that Jews live predominantly in towns. Villages and manors are substantially segregated by denomination, whereas towns are less segregated. Yet, we find relatively lower levels of segregation by literacy. Regression analyses with county-fixed effects show that a larger share of Protestants is associated with higher literacy rates across all location types. A larger share of Jews relative to Catholics is not significantly associated with higher literacy in towns, but it is in villages and manors. Finally, a larger share of Jews is associated with lower fertility in towns, which is not explained by differences in literacy.
    Keywords: Religion ; Segregation ; Literacy ; Fertility ; Prussia JEL codes: J13 ; J15 ; I21 ; N33 ; Z12
    Date: 2020
  24. By: Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Xin Sheng (Lord Ashcroft International Business School, Anglia Ruskin University, Chelmsford, CM1 1SQ, United Kingdom); Qiang Ji (College of Business, University of Tulsa, Tulsa, Oklahoma, United States)
    Abstract: In this paper, we analyse the role played by disaggregated oil shocks in driving real estate uncertainty (REU) over the monthly period of 1975:02 to 2017:12, based on impulse response functions generated from the local projection method. We find that the oil-specific consumption demand shock is statistically the strongest predictor of higher future REU, followed by the significant negative impact from the aggregate supply shock especially for long-run REU. While the oil inventory demand shock has a short-lived positive impact on REU, global economic activity shock virtually play no role in driving the same. Our results have important implications for policymakers and investors.
    Keywords: Oil shocks, real estate uncertainty, local projection model, impulse response functions
    JEL: C22 Q41 R30
    Date: 2020–05
  25. By: Alia Aghajanian; Patricia Justino; Jean-Pierre Tranchant
    Abstract: This paper explores the relationship between household exposure to riots and social capital in urban India using a panel dataset collected by the authors in the state of Maharashtra. The analysis applies a random-effect model with lagged covariates to estimate the exogenous effect of riots on social capital. Households living in neighbourhoods prone to riots are more likely to invest in bridging social capital by joining community organizations but reduce face-to-face contact with neighbours.
    Keywords: Riots, Social capital (Sociology), Trust, bonding social capital, bridging social capital, vignettes, Violence
    Date: 2020
  26. By: Bracke, Philippe; Tenreyro, Silvana
    Abstract: Using the universe of housing transactions in England and Wales in the last twenty years, we document a robust pattern of history dependence in housing mar- kets. Sale prices and selling probabilities today are affected by aggregate house prices prevailing in the period in which properties were previously bought. We investigate the causes of history dependence, with its quantitative implications for the post-crisis recovery of the housing market. To do so we complement our analysis with administrative data on mortgages and online house listings, which we match to actual sales. We find that high leverage in the pre-crisis period and anchoring (or reference dependence) both contributed to the collapse and slow recovery of the volume of housing transactions. We find no asymmetric effects of anchoring to previous prices on current transactions; in other words, loss aversion does not appear to play a role over and above simple anchoring.
    Keywords: Housing market; Fluctuations; down-payment effects; Reference dependence; Anchoring; Loss aversion
    JEL: N0
    Date: 2020–01–01
  27. By: Felipe Lozano Rojas; Xuan Jiang; Laura Montenovo; Kosali I. Simon; Bruce A. Weinberg; Coady Wing
    Abstract: The relationship between population health and measures of economic well-being and economic activity is a long standing topic in health economics (Preston, 1975; Cutler, Deaton, and Lleras-Muney, 2006; Ruhm, 2000). The conceptual issues in analyzing the complicated link between health and economic well-being are central to understanding the implications of the COVID-19 epidemic in the United States The public health shock of the epidemic has direct economic impacts, but the mitigation policies governments are using to control the spread of the virus may also damage economic activity. We estimate how state job market conditions respond to state COVID-19 infections and school closures, which are the earliest of the major mitigation policies. Mitigation policies and local epidemiological conditions explain some of the variation in unemployment patterns. However, the historically unprecedented increase in new UI claims during the weeks of March 15-21 and March 22-28 was largely across-the-board and occurred in all states. This suggests most of the economic disruption was driven by the health shock itself. Put differently, it appears that the labor market slowdown was due primarily to a nationwide response to evolving epidemiological conditions and that individual state policies and own epidemiologic situations have had a comparatively modest effect.
    JEL: I1 J2 J6
    Date: 2020–05
  28. By: Qiu, Yun (Jinan University); Chen, Xi (Yale University); Shi, Wei (Jinan University)
    Abstract: This paper models the local and cross-city transmissions of the novel coronavirus in China between January 19 and February 29 in 2020. We examine the role of various socioeconomic mediating factors, including public health measures that encourage social distancing in local communities. Weather characteristics two weeks ago are used as instrumental variables for causal inference. Stringent quarantine, city lockdown, and local public health measures imposed since late January significantly decreased the virus transmission rate. The virus spread was contained by the middle of February. Population outflow from the outbreak source region posed a higher risk to the destination regions than other factors including geographic proximity and similarity in economic conditions. We quantify the effects of different public health measures in reducing the number of infections through counterfactual analyses. Over 1.4 million infections and 56,000 deaths could have been avoided as a result of the national and provincial public health measures imposed in late January in China.
    Keywords: 2019 novel coronavirus, transmission, quarantine, COVID-19
    JEL: I18 I12 C23
    Date: 2020–04
  29. By: Marie Le Mouel; Alexander Schiersch
    Abstract: Understanding the causes of the slowdown in aggregate productivity growth is key to maintaining the competitiveness of advanced economies and ensuring long-term economic prosperity. This paper is the first to provide evidence that investment in Knowledge-Based Capital (KBC), despite having a positive effect on productivity at the micro level, is a driver of the weak productivity performance at the aggregate level, by accentuating divergence between a group of “frontier” firms and the rest of the economy. Using detailed firm-level administrative data for Germany, we find evidence that the effect of KBC on productivity is heterogeneous across firms within industries: this effect is 3 times larger for firms in the top quintile of the KBC distribution compared to firms in the bottom quintile of the KBC distribution. We document the existence of divergence in productivity growth between top KBC users and the rest of firms at the industry level, and find that industries where this gap is larger are also those industries where the heterogeneity in the effect of KBC is highest and where average productivity growth was lower. The evidence hence supports the view that the use of KBC plays a role in explaining weak productivity growth, by accentuating differences between firms.
    Keywords: Knowledge-Based Capital, firm dynamics, productivity divergence
    JEL: D24 L25 O14 O30 O47
    Date: 2020
  30. By: Ivan Mendieta-Muñoz (University of Utah); Codrina Rada (University of Utah); Ansel Schiavone (University of Utah); Rudi von Arnim (University of Utah)
    Abstract: This paper analyzes regional contributions to the US payroll share from 1977 to 2017 and the four major business cycles throughout this period. We implement two empirical exercises. First, we decompose the US payroll share across states. Utilizing a Divisia index decomposition technique yields exact contributions of real wages, employment structure, labor productivity and relative prices across the states to the aggregate change in the payroll share. Key findings are that the decline in the aggregate (i) is driven by decoupling between real wage and labor productivity; and (ii) is initially driven by the rust belt states, but subsequently dominated by relatively large states. Second, we employ mixture models on real wages and labor productivity across US states to discern whether distinct mechanisms appear to generate these distributions. Univariate models (iii) indicate the possibility that two distinct mechanisms generate state labor productivities, raising the question of whether regional dualism has taken hold. Lastly, we use bivariate mixture models to investigate whether such dualism and decoupling manifest in the joint distributions of payroll shares and labor productivity, too. Results (iv) are affirmative, and further suggest a tendency for high performing states to have relatively high payroll shares initially, and low payroll shares more recently.
    Keywords: labor share; US states; Divisia decomposition; mixture models
    JEL: D33 C43 O41 O5
    Date: 2020–04
  31. By: Francesco Amodio; Michele Di Maio; Yifan Li; Patrizio Piraino
    Abstract: We study the relationship between product market competition and labour market outcomes in South Africa. We combine firm-level data from tax records with individual-level data from the labour force survey. We estimate markups across sectors, and derive a measure of employment concentration in high-markup sectors across South African district municipalities. We then test whether individual labour market outcomes differ systematically in those district municipalities where employment is more concentrated in high-markup sectors.
    Keywords: product market competition, Tax data, Unemployment
    Date: 2020
  32. By: Minford, Patrick (Cardiff Business School); Gai, Yue (Cardiff Business School); Ou, Zhirong (Cardiff Business School)
    Abstract: This paper investigates whether housing collateral is important to the business cycle in China. We develop two models, one without housing collateral as benchmark and one variant allowing for it. Indirect Inference procedure tests these two modelsÕ compatibility with the data. We find that the benchmark model passes the test, while the collateral model is strongly rejected. According to the benchmark model, shocks from the housing market have limited impact on the Chinese business cycle. By contrast, the exogenous spending shock from gov- ernment and net exports, the monetary policy shock and the goods-sector cost/productivity shock, all in turn most likely connected to world business cycle shocks (especially the global financial crisis), are found to be the main drivers.
    Keywords: Housing market; DSGE model; Housing collateral; Indirect Inference; China;
    JEL: E32 E44 E52 R31
    Date: 2020–05
  33. By: Nils Grashof (University of Bremen); Dirk Fornahl (University of Bremen)
    Abstract: In the 21st century clusters can be observed in most developed economies. However, the scientific results regarding the effect of clusters on firm performance are highly contradictive. This inconsistency in the empirical results makes it difficult to infer general conclusions about the firm-specific cluster effect, referring to the effect from being located in a cluster on firm performance, e.g. derived through the externalities within clusters. Therefore, this paper aims to reconcile the contradictory empirical findings. It investigates whether the still prevalent assumption that clusters are a beneficial location for firms is unconditionally true or whether doubts about the alleged positive effect of clusters on firm performance are justified. By conducting a descriptive meta-analysis of the empirical literature, based on four different performance variables from four separate publication databases, the study investigates the actual effect direction as well as possible moderating influences. We find evidence for a rather positive firm-specific cluster effect. However, we identify several variables from the micro-, meso- and macro-level that directly or interactively moderate the relationship between clusters and firm success. The corresponding results demonstrate, for example, that a negative firm-specific cluster effect occurs more frequently in low-tech industries than in high-tech industries. ‘To be or not to be’ located in a cluster is therefore not the question, but it rather depends on the specific conditions.
    Keywords: : meta-analysis, cluster effect, firm performance
    Date: 2020–03
  34. By: Bailey, Michael; Kuchler, Theresa; Russel, Dominic; State, Bogdan; Stroebel, Johannes
    Abstract: We use aggregated data from Facebook to study the structure of social networks across European regions. Social connectedness declines strongly in geographic distance and at country borders. Historical borders and unions — such as the Austro-Hungarian Empire, Czechoslovakia, and East/West Germany — shape present-day social connectedness over and above today’s political boundaries. All else equal, social connectedness is stronger between regions with residents of similar ages and education levels, as well as between those that share a language and religion. In contrast, region-pairs with dissimilar incomes tend to be more connected, likely due to increased migration from poorer to richer regions. We find more socially connected region-pairs to have more passenger train trips between them, even after controlling for distance and travel time. We also find that regions with a higher share of connections to other countries have higher rates of trust in the E.U. and lower rates of voting for anti-E.U. political parties.
    Date: 2020–04–28
  35. By: Ayanda Hlatshwayo; C. Friedrich Kreuser; Carol Newman; John Rand
    Abstract: This paper uses matched employer-employee data from South Africa to examine the extent to which technology transfers between firms through the hiring of workers. Allowing for differential spillovers based on observable technology differences between sending and receiving firms, we find strong evidence for positive productivity spillovers through worker mobility. In contrast to previous studies set in more advanced economies, our results suggest that negative spillovers can occur.
    Keywords: Technology transfer, Job mobility, Linked employer-employee data, Spillovers
    Date: 2019
  36. By: Aksoy, Cevat Giray (European Bank for Reconstruction and Development); Tumen, Semih (TED University)
    Abstract: Can high-quality local governance alleviate the environmental impact of large-scale refugee migration? The recent surge in refugee flows has brought additional challenges to local governments in Europe, the Middle East and certain regions of Africa and Asia. In this paper, we focus on the case of Syrian refugees in Turkey and show that the quality of local governance plays a critical role in mitigating the environmental deterioration. We employ text analysis methods to construct a unique data set on local governance quality from the independent audit reports on municipalities. Using a quasi-experimental econometric strategy, we show that the Syrian refugee influx has worsened environmental outcomes along several dimensions in Turkey. Specifically, we find that the deterioration in environmental outcomes is almost entirely driven by provinces with poor-quality governance. Those provinces fail to invest sufficiently in waste management practices and environmental services in response to increased refugee settlements. We argue that good local governance practices can smooth out the refugee integration process and complement the efforts of central governments.
    Keywords: Syrian refugees, environment, waste management, local governance, text analysis
    JEL: F22 H76 Q53
    Date: 2020–04
  37. By: Henrique Z. Motte; Rodrigo C. Oliveira
    Abstract: Can students' rank in the ability distribution of their class impact their academic achievement? We aim to answer this question using a discontinuity generated by a rule for the distribution of students between classes at a prestigious Brazilian university. The rule means that in almost 30 per cent of its courses, the Federal University of Bahia allocates 50 per cent of the best students in the university entrance exam to the group that starts in the first semester, and the other 50 per cent to the group that starts in the second semester.
    Keywords: Affirmative action, Brazil, Education, labour markets, Peer effect
    Date: 2020
  38. By: van den Berg, Gerard J. (University of Bristol); Siflinger, Bettina M. (University of Bristol)
    Abstract: This paper studies the effects of day care exposure on behavioral problems and mental health as well as on various aspects of physical health, at various ages during childhood. We draw on a unique set of comprehensive individual-level out-patient and inpatient health care register data from Sweden over the period 1999-2008 merged with other population register data. By exploiting variation in daycare exposure by age generated by a major day care policy reform, we estimate cumulative and instantaneous effects on child health at different ages. We find beneficial cumulative impacts on behavioral and mental health at primary school ages, and substitution of the incidence of infections from primary school ages to low ages. The evidence suggests that the behavioral effects are mostly driven by children from low socio-economic households. Day care usage affects health care utilization and leads to a moderate reduction in health care costs
    Keywords: Health; day care
    JEL: I10
    Date: 2020–04–20
  39. By: Jiang, Gege; Fosgerau, Mogens; Lo, Hong
    Abstract: This paper sets up a rational inattention model for the route choice problem in a stochastic network where travelers face random travel time. Previous research has assumed that travelers incorporate all provided information without effort. This study assumes that information is costly and that travelers rationally choose how much information to acquire prior to choosing route. We begin with a single traveler and then extend the model to heterogeneous travelers where rationally inattentive user equilibrium (RIUE) is achieved. From the perspective of a single traveler, more information always reduces the impact of travel time variability and increases the probability of choosing a less costly route. However, in RIUE, more information may reduce the social welfare in some scenarios.
    Keywords: Rational inattention; Travel time variability; Imperfect information; Information strategy; Discrete choice
    JEL: D8 R4
    Date: 2020
  40. By: Isaksson, Ann-Sofie (Research Institute of Industrial Economics (IFN))
    Abstract: Recent empirical evidence suggests that Chinese development finance may be particularly prone to elite capture and patronage spending. If aid ends up in the pockets of political elites and their ethno-regional networks, this may exacerbate ethnic grievances and contribute to ethnic mobilization. The present paper examines whether Chinese development projects make local ethnic identities more salient in African partner countries. A new geo-referenced dataset on the subnational allocation of Chinese development finance projects to Africa is geographically matched with survey data for 50,520 respondents from 11 African countries. The identification strategy consists in comparing sites where a Chinese project was under implementation at the time of the interview to sites where a Chinese project will appear subsequently. The empirical results indeed suggest that living near an ongoing Chinese project makes ethnic identities more salient. There is no indication of an equivalent pattern when considering development projects of other donors.
    Keywords: China; Aid; Ethnic identities; Africa
    JEL: F35 O19 O55
    Date: 2020–05–06
  41. By: Tomoko Kinugasa (Graduate School of Economics, Kobe University); Akifumi Eto (Graduate School of Agricultural Science, Kobe University,Museum of Nature and Human Activities,Hyogo); Koji Yasuda (Graduate School of Economics, Kobe University,Aomori Public University)
    Date: 2020–05
  42. By: Kevin Lang; Ariella Kahn-Lang Spitzer
    Abstract: The authors of this article review the empirical literature in economics on discrimination in the labor market and criminal justice system, focusing primarily on discrimination by race.
    Keywords: Race Discrimination, employment, criminal justice
  43. By: Annette Alstadsæter; Bernt Bratsberg; Gaute Eielsen; Wojciech Kopczuk; Simen Markussen; Oddbjorn Raaum; Knut Røed
    Abstract: Using real-time register data we document the magnitude, dynamics and socio-economic characteristics of the crisis-induced temporary and permanent layoffs in Norway. We find evidence that the effects of social distancing measures quickly spread to industries that were not directly affected by policy. Close to 90% of layoffs are temporary, although this classification may change as the crisis progresses. Still, there is suggestive evidence of immediate stress on a subset of firms that manifests itself in permanent rather than temporary layoffs. We find that the shock had a strong socio-economic gradient, hit a financially vulnerable population, and parents with younger children, and was driven by layoffs in smaller, less productive, and financially weaker firms. Consequently though, the rise in unemployment likely overstates the loss of output associated with the layoffs by about a third.
    JEL: E24 J11 J4 J6
    Date: 2020–05
  44. By: Alessandra Colombelli (DIGEP, Politecnico di Torino); Elena Grinza (LUISS University); Valentina Meliciani (Department of Management, University of Turin); Mariacristina Rossi (Collegio Carlo Alberto)
    Abstract: In this paper, we examine whether the existing stock of migrant firms induces more new firms of the same co-ethnic group in the same sector and province. We do so by analyzing the number of new firms created each year by country of origin, sector, and province, drawing on administrative data of the population of individual entrepreneurs observed over the period 2002-2013. We find support for a strong attractiveness (pulling) effect. We also find that this effect significantly differs by gender: female migrant entrepreneurs show lower reactiveness to the existing stock of firms compared to their male counterparts. We finally show that such gender differences are stronger for migrants coming from more gender-unequal countries. On the contrary, the degree of gender inequality in the region of destination does not matter.
    Keywords: Migrant entrepreneurship, pulling effect, gender differences, gender inequality, country of origin, region of destination
    JEL: L26 J15 J16
    Date: 2020–05
  45. By: Milena Djourelova
    Abstract: Can the language used by mass media to cover policy relevant issues affect readers' policy preferences? I examine this question for the case of immigration, exploiting an abrupt ban on the term "illegal immigrant" in wire content distributed to media outlets by the Associated Press (AP). Using text data on AP dispatches and the content of a large number of US print and online outlets, I find that articles mentioning "illegal immigrant" decline by 28% in outlets that rely on AP relative to others. This change in language appears to have had a tangible impact on readers' views on immigration. Following AP's ban, individuals exposed to outlets relying more heavily on AP tend to support less restrictive immigration and border security policies. The effect is driven by frequent readers and does not apply to views on issues other than immigration.
    Keywords: mass media, media slant, Framing, Immigration
    JEL: D72 L82 Z13
    Date: 2020–05

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